Cambrex Reports First Quarter 2012 Results
Posted on May 03, 2012 at 16:06 PM EDT
EAST RUTHERFORD, N.J., May 3, 2012 /PRNewswire/ -- Cambrex Corporation (NYSE: CBM) reports first quarter results for the period ended March 31, 2012.
First Quarter of 2012 Operating Results – Continuing Operations
Sales in the first quarter of 2012 of $70.6 million were 14.4% higher than the first quarter of 2011. Foreign exchange unfavorably impacted sales by 2.3%. The increase is primarily due to higher volumes of controlled substances and generic active pharmaceutical ingredients ("APIs").
Gross margins in the first quarter of 2012 increased to 31.8% from 28.3% in the first quarter of 2011. Excluding a favorable impact from foreign currency, first quarter of 2012 margins increased to 30.7%. The increase is due to higher production volumes, leading to increased plant efficiencies.
Selling, General and Administrative Expenses in the first quarter of 2012 were $10.0 million compared to $9.1 million in the same period last year. The increase is primarily the result of increased sales and marketing expenses, higher medical expenses and higher personnel related expenses.
Operating Profit increased to $10.1 million in the first quarter of 2012 from $5.3 million in the first quarter of 2011. As described above, increased profits, primarily driven by higher sales volumes, were partially offset by lower pricing and slightly higher operating expenses.
Net Interest Expense increased to $0.7 million in the first quarter of 2012 from $0.6 million in the same period last year. This increase is primarily due to higher average interest rates partially offset by lower average debt in the first quarter of 2012. The average interest rate on debt was 2.0% in the first quarter of 2012 versus 1.6% in the first quarter of 2011.
Equity in Losses of Partially-Owned Affiliates includes $0.5 million and $0.4 million in the first quarters of 2012 and 2011, respectively, for the Company's share of losses in Zenara Pharma, a pharmaceutical company focused on the formulation of finished dosage form products. Cambrex owns a 51% stake in Zenara. The Company's share of Zenara's losses includes $0.3 million of amortization expense in both first quarters of 2012 and 2011. Equity in Losses of Partially-Owned Affiliates for the first quarter of 2012 also includes income of $0.3 million related to an investment in a European joint venture.
The Provision for Income Taxes totaled $2.2 million and resulted in an effective tax rate of 23.9% in the first quarter of 2012. The Company's effective tax rate has been and is expected to remain highly sensitive to the geographic mix of income due to the Company's inability to recognize tax benefits where there has been a recent history of losses, primarily in the U.S.
Income from continuing operations for the first quarter of 2012 was $7.0 million or $0.24 per share compared to $2.9 million or $0.10 per share in the first quarter of 2011.
Capital expenditures and depreciation for the first quarter of 2012 were $2.6 million and $5.4 million, respectively, compared to $1.7 million and $5.6 million in the first quarter of 2011, respectively.
Steven M. Klosk, President and Chief Executive Officer, said, "We are very pleased with the strong sales and profit growth in the first quarter driven by most of our product categories. The business generated significant volume increases in controlled substances and generic APIs and we continue to make progress with new product development programs to support future growth."
Guidance – Continuing Operations
Capital expenditures are expected to be approximately $16 to $19 million and depreciation is expected to be $21 to $23 million in 2012.
The financial information contained in this press release is unaudited, subject to revision and should not be considered final until the Company's first quarter 2012 Form 10-Q is filed with the SEC.
Conference Call and Webcast
Forward Looking Statements
For further details and a discussion of these and other risks and uncertainties, investors are encouraged to review the Cambrex Annual Report on Form 10-K for the fiscal year ended December 31, 2011, including the Forward-Looking Statement sections therein, and other filings with the U.S. Securities and Exchange Commission.
SOURCE Cambrex Corporation
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